How Do You Calculate Sales Tax in Canada?
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Did you know that Canada has three types of sales tax? Not only that, but the name for them sometimes changes between provinces.
Our tool will help you calculate sales tax whether you are an individual looking for better clarity or a business owner unsure of what you need to charge. GST/HST, PST, RST and QST are all covered.
The guide below will help you to understand the difference between GST, PST and HST, how to use our sales tax calculator, learn about GST/HST credits and business owner’s responsibilities.
How do you calculate sales tax?
Wondering how to add tax? HelloSafe has created the sales tax calculator above to see GST/HST, PST, RST and QST. Simply, select your province or territory, the amount and where that amount is before or after taxes are applied.
The calculator tool will let you know either how much tax must be added to that amount. You can also calculate the pre-tax amount if it has already been applied.
Sales tax in Canada is more complex than in many countries. Rather than a single national rate that is built into prices, different provinces apply taxes at different rates. Therefore, location is key to determining how taxes are added.
But that is not the only complication, advertised consumer-facing prices often do not include the sales tax. This can disguise the real cost of buying an item or service.
What is GST?
GST stands for goods and service tax. This value-added federal tax has been set at 5% since 2008. It is applied to most goods and services in Canada.
Consumer-facing prices are usually shown pre-GST. This good and sales tax is listed separately on receipts or invoices.
For example, if you spent $100 on a purchase in Alberta your total would come to $105.00. Alberta, the Northwest Territories, Nunavut and Yukon do not have additional sales taxes beyond the GST.
What is PST tax?
PST stands for provincial sale tax. These taxes are run by their respective provincial governments.
It is applied in British Columbia and Saskatchewan. In Manitoba and Quebec, provincial sales tax exists under the names RST and QST.
BC levies a 7% PST and Manitoba a 6%. This means 12% and 11% overall sales taxes respectively.
The $100 purchase that would have cost you $105 in Alberta would be $112.00 and $110.00 respectively in BC and Manitoba.
As is the case with GST tax, prices of goods and services advertised to consumers are usually not inclusive of PST. The taxes are listed separately on receipts or invoices.
A receipt with PST could look like this:
What is RST?
RST stands for retail sales tax. It is Manitoba’s equivalent of the PST. RST is applied at 7%. This means that most goods and services in Manitoba are taxed at 12% when combined with GST.
What is QST?
QST stands for Quebec sales tax. This is equivalent to the PST, only under a different name. In French, it is abbreviated as TVQ or taxe de vente du Québec. You may see TVQ on an invoice from a company based in Quebec. QST is applied at 9.975%. When GST is added, most goods and services in Quebec are taxed at a combined 14.975%.
Good to know
Businesses operating in British Columbia, Manitoba, Quebec or Saskatchewan need to register to collect GST and the provincial PST/RST/QST.
What is HST?
HST stands for harmonized sales tax. This so-called "harmonized tax" is a combined PST and GST. HST helps simplify sales tax for businesses operating in the provinces that use it, as only one tax needs to be applied and tracked.
HST is applied in:
- New Brunswick
- Newfoundland and Labrador
- Nova Scotia
- Prince Edward Island
The combined GST/HST is 15% in the Maritime Provinces. In Ontario, it is 13%.
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How much is the sales tax in my province?
Want to compare how your province's total tax rate compares to other parts of Canada? This chart will let you know what types of taxes and what rates apply where you live.
|Province or Territory||Type(s)||PST/QST/RST||GST||HST||Total Tax Rate|
|British Columbia||GST + PST||7%||5%||12%|
|Manitoba||GST + RST||7%||5%||12%|
|Newfoundland and Labrador||HST||15%||15%|
|Prince Edward Island||HST||15%||15%|
|Quebec||GST + QST||9.975%||5%||14.975%|
|Saskatchewan||GST + PST||6%||5%||11%|
For more information about sales tax in your province or territory see our guides below:
What goods and services are taxed differently?
While GST/HST are applied to most goods and services there are some exceptions. Some are taxed at different rates, while others are entirely exempt.
What goods and services are exempt from taxes?
Some goods and services in Canada are classified as zero-rated or tax-exempt.
Zero-rates goods include:
- Basic groceries from a grocery store like milk bread, meat, fish, fruit and vegetables
- Feminine hygiene products
- Medical devices
- Prescription drugs
- Agricultural products and farm equipment
Exempt services include:
- Child care
- Financial and tax services
- Medical and dental services
- Municipal transit
- Ferry service
- Travel insurance
Zero-rated and tax-exempt goods and services are functionally the same for consumers. Simply put, customers do not pay tax on the items or services.
Zero-rated means that if you paid GST/HST on property and services to provide the supplies, you may be eligible for input tax credits (ITC). If you believe you may be eligible for these tax credits speak with a tax or accounting. professional.
What goods and services are taxed at different levels?
Housing in Canada is often taxed under different rules. For new housing or heavily renovated housing under $450,000 may be eligible for GST/HST rebates.
In Ontario a $400,000 property could qualify for $6,300 in GST and $24,000 in HST rebates. The rules change from province to province and go beyond the scope of this article. If you are home shopping it is worth looking at your provincial rules.
There are numerous exceptions. These include:
- Lodging and hotel room fees taxed at 4% and 5% in Alberta and Manitoba.
- QST is not applied to books in Quebec, but GST is. This means books are taxed at 5% total.
- 10% on liquor consumption in Saskatchewan.
What is the GST/HST tax credit?
The GST/HST credit is a quarterly payment given to low and moderate-income individuals and families to offset their sales taxes. It is paid out four times per year on:
- January 5th
- April 5th
- July 5th
- October 5th
It is tax-free with a base credit of $299. There is an additional credit of $157 if a family's net income is more than $9,686.
After $38,892 net income, the credit is gradually reduced until it disappears.
To be eligible you must be older than 19 and have filed a tax return for the previous year.
As the program is designed to help low and moderate-income individuals and families, there are income eligibility requirements.
Income limits for receiving GST/HST credit:
|# of Children||Single||Couples (married or common-law)|
Provinces and territories run related tax credit programs. For more information about where you live, please refer to the pdf below.
How do I charge sales tax as a business owner?
As a business owner, you are responsible for applying sales taxes to most goods and services you sell. Simply add the type(s) and amounts required by your province or territory. Track how much sales tax you charge and how much sales you paid to your suppliers. At tax time, you pay the difference between what you collected and paid.
Good to know
Sales taxes collected - sales taxes paid = amount owed at the end of the tax period.
What sales tax do I charge for out-of-province sales?
The sales tax charged to out-of-province customers depends on where the product or service is supplied.
If they buy it while physically in your business, apply your provincial taxes. If you deliver it to them in their province or territory, you must charge sales tax based on their provincial taxes.
Do I need to register for GST/HST as a business owner?
You only need to register for GST/HST if your business has reached $30,000 in sales in a quarter. This can be a time-saver for very small businesses.
There are three ways to register for a GST/HST account number:
- Register online with the Canada Revenue Aagency:
- By telephone at 800-959-5525
- By mail or fax
To register by mail send form RC1 E to your nearest tax centre or tax services office
How do I pay GST/HST as a business owner?
GST/HST can be paid, or technically remitted, three ways:
- At a financial institution in Canada
- By mail (for payments of less than $50,000)
To pay electronically, visit the Canada Revenue Agency’s My Payment portal.
GST/HST is paid monthly, quarterly or annually depending on the size of your business.
Do I need to register for PST?
If your province operates a PST, RST or QST tax, you are required to collect these taxes on your sales.
To register visit the corresponding provincial government portal below:
|Province||Name of sales tax||Where to register|